Question 1

Normative statements are concerned primarily with

Accepted Answer

A)  facts and theories.
B)  what ought to be.
C)  what is.
D)  rational choice involving costs and benefits.E) A) and D)
F) B) and D)

Question 2

(Last Word)  A caller to a radio talk show states that oil companies are "greedy price gougers." This is an example of

Accepted Answer

A)  loaded terminology.
B)  the "after this, therefore because of this fallacy."
C)  the fallacy of composition.
D)  the economic perspective.E) A) and D)
F) A) and B)

Question 3

The alternative combinations of two goods that a consumer can purchase with a specific money income is shown by

Accepted Answer

A)  a production possibilities curve.
B)  a demand curve.
C)  a consumer expenditure line.
D)  a budget line.E) All of the above
F) C) and D)

Question 4

Which of the following lists includes only capital resources (and therefore no labor or land resources) ?

Accepted Answer

A)  an ice arena, a professional hockey player, hockey uniforms
B)  the owner of a new start-up firm, a chemistry lab, a researcher
C)  a hydroelectric dam, water behind the dam, power lines
D)  autos owned by a car rental firm, computers at the car rental agency, vans used to shuttle rental customers to and from the airportE) B) and D)
F) A) and D)

Question 5

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

Accepted Answer

A) True 
 B)False

Question 6

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

Accepted Answer

A) True 
 B)False

Question 7

In drawing a particular budget line, money income and the prices of the two products are fixed.Test Bank: I Topic: Unemployment, Growth, and the Future

Accepted Answer

A) True 
 B)False

Question 8

On a production possibilities curve, the single optimal or best combination of output for any society

Accepted Answer

A)  is at a point near the top of the curve.
B)  is at the precise midpoint of the curve.
C)  is at a point near the bottom of the curve.
D)  depends upon the preferences of society.E) All of the above
F) A) and B)

Question 9

When a nation is under-allocating resources to the production of a good, then the

Accepted Answer

A)  marginal benefit is greater than the marginal cost of the good.
B)  marginal benefit is less than the marginal cost of the good.
C)  marginal cost of producing the good is decreasing.
D)  marginal benefit of producing the good is increasing.E) A) and C)
F) B) and D)

Question 10

Which of the following is assumed in constructing a typical production possibilities curve?

Accepted Answer

A)  The economy is using its resources inefficiently.
B)  Resources are perfectly shiftable among alternative uses.
C)  Production technology is fixed.
D)  The economy is engaging in international trade.E) None of the above
F) C) and D)

Question 11

(Last Word)  The fallacy of composition is essentially the error of

Accepted Answer

A)  omitting relevant variables in constructing a model.
B)  reasoning from the general to the particular.
C)  confusing cause and effect in economic relationships.
D)  generalizing from the particular to the general.Topic: Theories, Principles, and ModelsE) B) and C)
F) B) and D)

Question 12

Economic principles are value judgments about what the economy should be like or the way the economic world ought to be.

Accepted Answer

A) True 
 B)False

Question 13

The budget line shows the various incomes that an individual can earn from different jobs.

Accepted Answer

A) True 
 B)False

Question 14

The main function of the entrepreneur is to

Accepted Answer

A)  make routine pricing decisions.
B)  innovate.
C)  purchase capital.
D)  create market demanD.E) A) and D)
F) B) and C)

Question 15

Which of the following is a microeconomic statement?

Accepted Answer

A)  The real domestic output increased by 1.6 percent last year.
B)  Unemployment was 5.2 percent of the labor force last year.
C)  The price of smartphones declined 2.8 percent last year.
D)  The general price level increased by 1.1 percent last year.E) A) and B)
F) All of the above

Question 16

The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that

Accepted Answer

A)  the principle of increasing opportunity costs is relevant.
B)  society's resources are limited.
C)  the opportunity cost of producing each product is constant.
D)  resources are perfectly substitutable between alternative uses.E) A) and D)
F) B) and C)

Question 17

The slope of a graph that shows a direct relationship is

Accepted Answer

A)  always positive.
B)  either positive or negative.
C)  possibly zero.
D)  either zero or infinite.E) B) and C)
F) C) and D)

Question 18

If falling gasoline prices are good for the consumers, then they must be good everyone in the economy.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following illustrates a macroeconomic question?

Accepted Answer

A)  Should the salaries of financial executives be regulated by the government?
B)  Are increasing wage demands by workers contributing to price inflation?
C)  What is the least costly way to produce automobiles and trucks in the United States?
D)  Will the introduction of a new computer chip change the demand for computers?E) B) and C)
F) A) and B)

Question 20

Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.

Accepted Answer

A) True 
 B)False

Exam 1: Limits, Alternatives, and Choices

Which of the following is assumed in constructing a typical production possibilities curve?

Correct AnswerverifiedShow Answer

(Last Word) A caller to a radio talk show states that oil companies are "greedy price gougers." This is an example of

Correct AnswerverifiedShow Answer

On a production possibilities curve, the single optimal or best combination of output for any society

Correct AnswerverifiedShow Answer

When a nation is under-allocating resources to the production of a good, then the

Correct AnswerverifiedShow Answer

Normative statements are concerned primarily with

Correct AnswerverifiedShow Answer

(Last Word) The fallacy of composition is essentially the error of

Correct AnswerverifiedShow Answer

The budget line shows the various incomes that an individual can earn from different jobs.

Correct AnswerverifiedShow Answer

If falling gasoline prices are good for the consumers, then they must be good everyone in the economy.

Correct AnswerverifiedShow Answer

Which of the following is a microeconomic statement?

Correct AnswerverifiedShow Answer

Which of the following illustrates a macroeconomic question?

Correct AnswerverifiedShow Answer

Which of the following lists includes only capital resources (and therefore no labor or land resources) ?

Correct AnswerverifiedShow Answer

Economic principles are value judgments about what the economy should be like or the way the economic world ought to be.

Correct AnswerverifiedShow Answer

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

Correct AnswerverifiedShow Answer

The alternative combinations of two goods that a consumer can purchase with a specific money income is shown by

Correct AnswerverifiedShow Answer

The slope of a graph that shows a direct relationship is

Correct AnswerverifiedShow Answer

In drawing a particular budget line, money income and the prices of the two products are fixed.Test Bank: I Topic: Unemployment, Growth, and the Future

Correct AnswerverifiedShow Answer

Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.

Correct AnswerverifiedShow Answer

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

Correct AnswerverifiedShow Answer

The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that

Correct AnswerverifiedShow Answer

The main function of the entrepreneur is to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified